Energy giant SSE is exploring major investments in ultrafast broadband infrastructure, threatening a new challenge to BT and Virgin Media.

The deep-pocketed utilities provider is working on the business case for laying new fibre optics to homes and businesses that would offer faster, more reliable internet connections than copper telephone lines or cable.

David Walter, director of SSE’s fledgling broadband business, said the company was working on infrastructure investment plans “all the time” to accelerate its push into the telecoms sector. No firm decisions have been taken and an investment is not imminent.

The move would be seen as a major signal of confidence in the growing links between broadband and the utilities sector. SSE and its gas and electricity rivals are increasingly offering smart thermo­stats and other technology that needs an internet connection.

It would also be welcomed by regulators, which are trying to encourage more competition at infrastructure level.

Mr Walter said SSE would be likely to invest alongside partners in new fibre optics. It could share the cost of building new connections with retail rivals, and could plug into existing backbone networks, such as those owned by CityFibre and Vodafone.

SSE has been closely watching the progress of a similar project by TalkTalk in York. Mr Walter refused to rule out a major acquisition such as TalkTalk as a shortcut to major player status, but said SSE had a “clear idea of [what] multiple broadband subscribers are worth”.
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